Cardinal Theory of the utility

The cardinal theory of the utility indicates the design of the cardinals according to whom one can express by a number the quantity of Utilité gotten by an amount of consumption given.

This assumption of mesurability supposes that one can establish a hierarchy between the levels of utility: if the utility of $a$ is 100 and that of $b$ is 300, this wants quite simply to say that the utility of $b$ is three times higher than that of $a$ .

the util , unit fictitious installation by the cardinals is used to measure the utility. But this reality is not with the shelter of criticisms.

Definition

The precursors of the revolution marginalist (Walras, Jevons, Menger) conceived the utility like the feeling of pleasure associated with consumption with a good. They defended the idea of a cardinal measurement of the utility by supposing that the consuming was able to give an evaluation of the utility which any combination of goods brought to him. This faculty was the exact mirror of the capacity supposed of the producing to predict the production for any combination of inputs given, and simplified the analysis considerably. For teaching reasons, it was also used, with some reserves, by Alfred Marshall.

In addition to the util, the cardinals set up two principles:

the principle of the decrease of the marginal utility
the principle of the equalization of the marginal utilities

Contributions

Decreasing marginal utility

They distinguish two behaviors from the utility:

the marginal utility ( Um ), means the level of satisfaction gotten by the last consumed unit of a good or by each additional unit of a good.
total utility ( C ), i.e. intensity of satisfaction obtained by the consumption of a quantity of a good.

German Heinrich Gossen in 1854 stated the law known as of Gossen: " the intensity of a good pleasure which is prolonged decreases and ends up disappearing when the individual arrives to satiété".

It is what will be taken again by the neo-classic by retaining the assumption according to which Um gotten by each additional amount of a consumed good is decreasing and becomes null starting from a certain threshold called " not of satiety ". Beyond this point, Um of additional amounts can become negative and be transformed into desutility .

Equilibrium of the consumer or the equalization of the marginal utilities

Critical

the util , unit fictitious installation by the cardinals is used to measure the utility. But this reality is not with the shelter of criticisms.

Strongly criticized by the ordinal approach, this way of presenting the things is reduced to an error which would be very very far from daily reality. They advance the argument according to which it is impossible to quantify the degree preferably and to say it, for example: a portable gets more satisfaction to us than a computer.

However, this analysis is of an interest for the economic argument.

Internal bonds

Theory of the consumer (micro-economics)

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